How the Banking Sector Can Reimagine Customer Loyalty with Embedded Finance?
November 21, 2023
In today’s digital world, customer loyalty and retention play a significant role crucial to help businesses thrive. As the traditional approach of price and quality offerings no longer helps to attract and retain customers, businesses must now focus on “reimagined” consumer who expects personalized services, valuable offerings, relevant rewards, and more.
To cater to these evolving customer expectations, banking and finance institutions are turning to embedded finance as an essential strategy in Bank Loyalty Programs to enhance customer satisfaction and retention. In this blog, we will learn how embedded finance can help redefine customer loyalty in the banking industry.
Understanding the Reimagined Consumer
As per the study by Accenture, a new group of consumers identified as “Reimagined” are the ones that have fully embraced digital transformation and rely heavily on mobile devices and e-commerce platforms for their day-to-day needs. After the pandemic outbreak, more than 50% of customers have changed their views on commerce resulting in higher expectations.
With indefinite choices of product and service providers available in the market, reimagined consumers seek convenience, personalization, sustainability, and security. Meeting this evolving consumer perspective is not possible without integrating embedded finance as an important business strategy, which will in turn help to attract loyal customers and enhance customer retention rate.
Embedded finance can be defined as the process of integrating financial services directly into non-financial businesses. This enables finance and banking companies to offer a wide range of financial products and services seamlessly to their customers, which helps in improving the customer experience to a huge extent with enhanced loyalty.
Ways to Use Embedded Finance & Meet the Needs of Reimagined Customer
As we learn about the importance the meeting the needs of reimagined consumers, Embedded finance is a must for businesses who want to enhance customer loyalty and retention. By leveraging virtual accounts, businesses can offer streamlined services to the end-users helping them stay engaged for better engagement and long-term meaningful relationships, thereby encouraging repeat business.
From virtual accounts, online and in-app payment processing, branded cards, and global transfers, to many other financial solutions, embedded finance can do wonders to unlock immense opportunities. Let’s find out how you can take the help of reliable loyalty software for fintech to integrate embedded finance and meet the evolving needs of reimagined consumers.
Also Read: Subscription Based Loyalty Programs in the Food & Beverage Industry
- Virtual Accounts
The best thing about using embedded finance is that it allows businesses to provide virtual accounts that customers can use for managing their funds, gaining interest, making bill payments, and sending/receiving money to any place they do business with. For instance, the big brand, Shopify offer bank account to its members and the ride share company Lyft make payments to their drivers by placing funds directly into their debit card accounts.
These bank accounts not only provide ease and convenience but also help provide personalized products and experiences to meet the needs of reimagined customers.
- Online and In-App Payment Processing
Another good thing about using embedded finance is in-app and online payment processing, which helps to streamline real-time transactions for customers. Big platforms such as Starbucks enable customers to order, pay, and pick up items seamlessly using their app.
These quick and convenient payment experiences increase customer satisfaction, loyalty, and retention rates.
- Brand Specific Cards
Brands can customize cards – debit, credit, gift or prepaid cards that allow their customers to pay conveniently, earn rewards during their spending and use their rewards whenever required.
Branded cards aligned with customer loyalty programs can be a great way to boost customer loyalty and retention as it helps to offer individualized service meeting the needs of reimagined customers.
- International Transfer
Making use of global payment solutions helps big companies to move money across borders with ease. By integrating embedded finance tools, brands can now send and receive money worldwide, at lower costs and time.
Additionally, this allows global firms to pay their workforce directly to their bank accounts in their local currencies providing ease and satisfaction.
How Embedded Finance Helps to Boost Customer Loyalty and Retention?
In this section, we will see how embedded finance can help to enhance customer loyalty and retention for businesses in the banking sector. By offering seamless and convenient financial services, businesses can unlock immense benefits such as lower customer churn rates and higher engagement throughout the customer journey.
Listed below are some key benefits of embedded finance-
- Ease & Convenience
With the help of embedded finance, businesses can streamline the customer experience in the finance sector, which makes it easier for their customers to access and utilize financial services. With services like in-app payments, virtual accounts, and other solutions, brands can reduce friction and simplify payment transactions, leading to higher customer satisfaction and loyalty.
- Tailor-Made Experiences
Embedded finance enables businesses to make use of customer data for personalized financial services with tailored experiences, which focus on customer preferences, habits, and trends. Delivering such targeted financial solutions that meet individual needs helps to boost customer loyalty and foster long-term relationships.
- Sustainability
With the reimagined consumer giving more emphasis on sustainability, businesses using embedded finance can align with these values. This means there will be a reduced carbon footprint as there will be less paperwork and physical travel.
- More Secure
Embedded finance solutions help to keep more focus on security and trust using technologies such as AI and machine learning that monitor patterns to ensure secure transactions and the protection of personal data.
Also Read: Best Approaches to Keep Your Loyalty Program Attentive
Final Takeaways
As we can see embedded finance can unlock an immense growth opportunity for fintech businesses helping them meet ever-changing customer expectations, embracing embedded finance is essential to attract and retain customers. Whether it’s convenience, personalized services, or secure financial solutions, businesses can meet all the demands of reimagined consumers.
This implies that to succeed in the embedded finance landscape, businesses need to reimagine their offerings, business models, as well as value propositions because, without that, they will risk finding new markets and losing existing customers. Connect with Novus, a renowned Loyalty Software for Fintech to help you explore new platform business models and leverage partnerships to embrace non-traditional revenue streams in your banking business.
Catch up with our experts at the Singapore Fintech Festival to learn how you can integrate embedded finance to help your business unlock new revenue streams and boost customer loyalty.